T-Mobile’s ‘UnCarrier’ data plans leaked

T-Mobile announced in December that it was planning to radically change the way it sold phones and service plans. The company said it will dump subsidies for handsets, and cut the costs of its voice, text and data plans as a benefit.

That’s very different from the way wireless carriers have operated in the United States. AT&T, Verizon and Sprint subsidize the cost of most phones, tying users to a contract to recoup those costs and charging more for services. But if customers pay for phones outright, contracts aren’t a necessity and service pricing can be reduced.

The big question for T-Mobile is this: Are enough mobile customers willing to pay significantly more for handsets in order to save on services and be free of contracts? Will people be willing to pay $600 for a Samsung Galaxy S III – the “Suggested retail” price on T-Mobile’s website – and save on monthly plans rather than pay a fraction of that up front but shell out more for voice and data?

It’s a big risk in the U.S., where consumers are conditioned to expect low-cost hardware. The devil will be in the details, and thanks to an apparent leak of T-Mobile’s data plans, we may know some of those specifics in advance of a planned March 26 reveal.

Earlier this month, TmoNews – a site that tracks T-Mobile news – got its hands on what appears to be marketing materials for services under its non-subsidy business model. T-Mobile will call itself the “UnCarrier” and offer in its own stores a very simple set of plans. Here’s a summary for individual plans:

A single line will cost $50 for unlimited talk, text and 500MB of web included automatically. To add unlimited data would be an additional $20 per month totaling $70. What if you don’t want unlimited data you ask? Each month you can use as much data as you see fit and T-Mobile will bill you $10 for each 2GB of data consumed. No need to call in and ask for a certain bucket, just use the data and receive a bill. You can go up to 12GB of data per line on every postpaid account, which is perfect for the time you travel and consume more data than usual. There is no mention of caps or overages, which begs the question for how T-Mobile will handle the pay per 2GB rate plan once you hit the 12GB cap.

There’s a similar simplified plan for families

Two lines will cost $80 which allows for unlimited talk, text and 500MB of web data included. Each added line will cost $10 per month and will also include 500MB of data along with unlimited talk and text. The same data rates then apply for each line: $10 per additional 2GB per line and $20 for unlimited data per line.

T-Mobile will still offer what it calls “Classic” plans through third-party retailers, according to a new report from TmoNews. Companies like Target, Walmart and RadioShack will want some way to offer phones with down payments, billing the customer later, and they’ll need a way to recoup those costs. Here’s that summary:

Like T-Mobile’s new Value Plans, they are moving to a one-size fits all Classic Plan. That allows for Unlimited Talk, Text and Web with 500MB of data thrown in automatically. As with the Value Plans, additional data will be the only extra cost allowing customers to choose from unlimited data or 2GB increment all the way to 12GB of data. The standard cost for Unlimited Talk, Text and 500MB of web will be $60, with unlimited data $90. Under the $60 plan, increments of 2GB of data use per month will raise the price by $20 from 500MB to 2GB and then $10 per 2GB increments afterwards.

If these documents are real, there remain a lot of questions, which should be answered by the March 26 event (at which T-Mobile is also expected to detail the launch of its LTE data network). But in the meantime, I’ve got a question for you: Are you willing to pay more money up front for a handset if it means a simplified, cheaper data plan and no contract?

Answer in the poll below and in the comments.

Are you willing to pay more up front for a mobile phone if it means no contract and cheaper monthly plans?

I have been using Walmart’s Straight Talk service for almost a year and love it! I started out with a Nokia that was less than desirable but now have a GS 2 that is awesome! They even offer several versions of the iphone!

Ok so the up front cost is high but with unlimited talk, text and data who can complain! My cell service now runs just under $50/month and I could not be happier!

With T-Mo’s new plan, you won’t have to pay up-front for the phone. They’re going to finance it for free. Meaning, the up-front payment for the newly announced iPhone, say, will be either $99 and $149 (depending on the model), and the customer will pay off the balance over the following 20 months (around $25 per month). Once the customer has entirely paid off the balance of the phone, that “phone charge” rolls off and your bill becomes immediately cheaper by that charge (keep in mind, the other carriers embed this cost into your bill, so your bill never actually stays lower). I like what T-Mo is doing.

A few days ago, I bought a new phone and got a new plan on T-Mobile. It actually ended up saving me some money overall and I ended up paying less out of pocket for the phone than I did the last time I upgraded.

Before my plan altogether was about $85 – I didn’t have unlimited messages so I wanted to switch to a plan that had that. Here’s what I ended up with:

Now, I think they do rebates slightly differently these days – depending on your credit and customer standing they may give you an instant rebate or a mail-in rebate (or a combination of the two). So everyone won’t have exactly this same setup and I think the down payment varies by phone and possibly by customer. But this is just to illustrate the difference in pricing structures:

Before, the true cost of the phone was built into the plan. I’d pay $199 (or some such) for the phone on the day of purchase, but the rest of the cost of the phone was reflected in that $85 I was paying monthly, for the duration of the 2 years I was committed. Now, I’m paying $80/mo total: $60 for the plan and $20 for the phone. Here’s the difference: once that phone is paid off, that $20 charge goes away and my bill is $60/mo. I’m still paying a portion of the phone’s true cost up front, but I’m now truly paying the phone off rather than rolling that cost into the plans. T-Mobile is still getting the money for the phone, they’re still getting a contract extension from you, but you’re not paying more than the phone actually costs in the end.

Dwight, after ready your colleague Loren Steffy’s Sunday article about the “Federal offense” of unlocking phones and taking them to use with another provider, wouldn’t leaving after 3 months with T-mobile and jumping on AT&T’s “regular” contract plans be criminal?

This new interpretation is definitely confusing. It appears that (1) this is likely to never be enforced, and (2) it could only be enforced based on a complaint by the carrier which sold the phone. AT&T has already said that they will continue to unlock phones per previous guidelines (off contract status, I think). I think Verizon is doing the same, but I haven’t checked.

Based on the alleged family plan options, it would cost me $120/month for my wife and I to have unlimited talk, text, and data. That’s pretty close to what we’re currently paying with AT&T, so I’m not seeing the huge savings promised by no longer subsidizing new hardware. I guess I’ll need to lay out all the numbers, including the real cost of a subsidized phone over the course of a contract, to see if things have actually changed all that much.

This is exactly what I’m seeing – it’s only slightly cheaper than what I have now with AT&T. Since T-Mobile is in last place with an inferior network, these prices would be fine but only if they were subsidizing the phone as well.

The problem is that AT&T, Verizon and just about all the other major carriers no longer offer unlimited data plans. So, while you and your family may have been grandfathered in with one, the rest of us do not have the option of unlimited data on a good network. Therefore, T-Mobile’s plan is automatically a superior choice for those who intend to use their smartphone as a mobile computer (or who intend to use apps like Pandora and Youtube frequently).

This would be an outstanding choice of Verizon would offer it. My only hesitation in upgrading to a smartphone was the lack of a good option for unlimited data.

Currently no other company beside T-Mobile offers Unlimited data. VZW and At&t offer shared data plans. When you truly compare apples to apples, the new Uncarrier plans are significantly less expensive. There is no overage and no throttling. You can keep streaming data on the 4G network.

My hope is this new T-Mobile strategy can help drive down the ridiculously high data fees being charged by the major wireless carriers. For two data and three analog phones I am paying $250 per month. What really curls my hair is the outrageous cost charged for analog phones in these new “data only” plans. A phone with no data is only given a measly ten dollar discount.

I don’t think it would work for people who use a smart phone for a company that has a “Bring Your Own Device” policy, where the company pays for the plan but the employee must purchase the phone. Unsubsidized phones puts more of the cost on the employee, whereas they can currently have some of that cost paid back through the higher rates which their employer covers.

I agree, I’ve neve heard anything good about T-mobile. I’e had AT&T for 10 years now, never had a problem.
I don’t need a $600 phone, I use a phone to talk on, that’s it, no texting, no FB, no sharing pictures, nada.
My monthly bill is $52 with AT&T and the extra $2 is for road service, every 2 years I get a new phone free.
Tmobile would have to come up with a really good deal to beat that.

Not to be rude here, but T-Mobile doesn’t really care about you. The money is made off of smartphones – data plans, MMS, SMS, services…not voice. Seems like you have a good thing going, so no need to change. But T-Mobile is being smart in trying to attract data users with the unlimited web plans.

“It’s a big risk in the U.S., where consumers are conditioned to expect low-cost hardware.”

Most of the world does not do this, they buy their phones full-price. The shocking part to most Americans is, over a 2-year period it is usually a lot CHEAPER to buy the phone full-price (even better used). The lower price you get on the monthly bill usually more than makes up for the upfront cost. And you aren’t under contract so you have more freedom.

I bought my HTC One S used on ebay for $350, and my monthly bill with T-Mobile prepaid (unlimited everything) is $50. It saves me about $1000 over 2 years!

Since I own my phone, I recently switched to their $30 month-to-month plan (I think its $33 w/ all taxes) with no contract and no fees. Saves me plently of money since I’m not a teen sending 100 texts a day. Note that you don’t even have to buy one of their phones. You can get one cheaper off the internet. Hopefully, I’ll never have to have a contract again.

We have used boost the last couple of years. New android phones are only about 150 now, we dont need latest and greatest. I have the LG venice we got for 150 at best buy. and 45 dollars a month. its only 3g but it is not used that much anyway. Soon good android phones will be about 100$ or less. Galaxy S4 and Iphone are 600 or 700? that is a scam, a good laptop is less than that. they are probably worth about 250$ or so.

TMobile already does this. When I got my SGSII 18 months ago, I could have paid the subsidized rate for the phone and sign a 2-year contract for phone/data/text at 70/mo, or pay full price for the phone and sign a contract for the exact same features at 50/mo. Because TMobile offered interest-free financing, the full-price phone was cheaper over the 2-year contract.

It gets even better if I keep the phone past 2 years and go month to month, b/c I’m billed at the cheaper rate. If I had bought the subsidized phone, I’d be billed at the higher contract rate if I go month to month.

Several people have noted that on other carriers you continue to pay for your phone after it is paid off since there is no reduction in billing at the end of the contract period. This is true, but very misleading for most users. Most users get a new phone as soon as their contract expires, thus your continued high bill isn’t really paying extra for the paid off phone, it is paying for your upgrade.

If you elect to stay with your old and now paid off phone, there are other billing options you can look into with most carriers.

I’m a current T-Mobile customer, and my family plan is (pre-tax) $115, and includes handset subsidy. With the Value plan, that plan would go up to $120 + $40 for the EIP on 2 phones ($20), for a total of $160. After several years of being a T-Mobile customer, I’m now seriously considering leaving. Virgin Mobile will give me unlimited everything for $55 a line, and I can buy 2 Samsung Galaxy S 2 phones for $299 each, instead of $500 each from T-Mobile. I’m eligible for upgrade in October, so I’ll see what they’re doing at that time. My contract expires in December, so I’ve got several months to think about it.

I am seriously considering going non-contract for my next phone. I would be more than willing to drop a couple hundred extra on the phone if I can get a cheaper plan.

At this point, I am considering a GSIII unlocked and getting a Straight Talk AT&T SIM card for it. Even fully unlimited, it seems like the best deal available. Note that you can get Straight Talk on AT&T or T-Mobile networks, so you have to make sure you get the right combo of phone and SIM. With AT&T’s coverage, that seems to be the way to go.

Have been running Straight Talk on an iPhone for something like nine months, and it’s been fine. There has been one time that I couldn’t send a message to an iMessage user and you have to jump through hoops to get MMS working on an iPhone, and then it breaks when you upgrade the OS, but otherwise, my coverage is no different than it was on AT&T. I’m saving $300 per year from my AT&T plan.

I recently had a smart phone with TMo (now with ATT) and my bill was running me about $90 per month, after all the BS taxes. This was NOT with unlimited data, but I didn’t have any overage problems. So, with the new plan I would be paying $50 + $20 for unlimited data (because 500 MB is honestly not very much for my usage), for a total of $70 per month. Add in the taxes and that is closer to $80 per month. To make a long story short, I’d be saving $10 per month and have to pay full price for the phone at about 5 or 6 hundy? I’ll pass…

I have used t-mobile for ever, just recently got a free GS3 out of them with rebate , my bill is about $55 . The trick is to tell them you are canceling and your bill is too high. They will work with you . If not, my phone has been unlocked before deadline date and I will switch to Straight talk , Another trick if switching to Straight Talk , buy there $45 card and call them to talk about setting it up , they will send you a free Sim, and yes Straight Talk works fine . Only complaint was with straight talk was there was sometimes a delay when making a call, but I realize you are paying for a cheaper service, sometimes you will realize why .

Why would you buy the phone from any of the carriers? You can find new or nearly new versions of just about any phone for any network for less than half the retail price? Just because T-Mobile might ask $600 for phoneX you can probably find a brand new one elsewhere for $300.

If the phones are still locked, I would not bother, they are financing phones at 0% now, and rates are only fair, pre-paid unlimited plans are less. T-Mobile’s network is not great in the Houston area either, but none of the others are any better.

Anything to get away from AT&T and toss my Galaxy S. Both are terrible. What’s worse is all the AT&T apps that I cannot delete and they’re mostly likely the ones causing my phone issues. As I write, the AT&T Smart Wifi app crashed (again) and my phone is dead until I reboot. AT&T Smart Wifi is a misnomer as it cannot find my wifi at work automatically even though I keep telling it to save and I have to manually log on.

Sounds like you need to root your phone and then delete the problem apps. I rooted my Galaxy S2 with T-mobile to get rid of the bloatware that I couldn’t delete without rooting. Just be sure to do plenty of research first so you don’t brick you phone in the process. Start with the android forums. That’s where I found an easy to follow guide on rooting my phone.

What I don’t like is the “$50 for unlimited talk, text” before you get to the data plan. I don’t have any need for unlimited talk and don’t ever use SMS texting.

They need to do the same thing with talk that they’re doing with data. That is, bill you for actual minutes used. In my case that would be about 20 minutes a month over cellular (much more over WiFi which doesn’t count). For me, the iPhone is a wonderful device that helps me avoid phone calls by providing better ways to communicate.

One of the things that bothers me about not having a contract is that the carrier is free to raise prices over time … which means that the consumer has less power.

I’ve had the same T-Mobile plan for almost ten years, and added data and text messaging to it. This strategy has kept my bill lower than anyone else’s, perhaps with the exception of MetroPCS. Going month to month would not allow me to keep that pricing secure.

“Paying more up front” is kind of missing the point. Does everyone need to buy the latest Samsung or Apple $600 – $800 phone every two years? I suppose you don’t necessarily save money if you’re constantly buying new phones at full price, but I don’t think most people actually do that.

You could actually hold on to that phone for more than two years, and you can just as easily buy a used or lower cost new phone (Google Nexus, Sony, and Blu have great phones for $350 or less) and save a ton of money. TMo will have lower monthly fees that are not available at all on the other carriers, so when you bring your phone there, you save money every month.

As others have noted, MVNOs have been doing this for years. Nice to see one of the big carriers catch on.

In most articles about non-subsidy plans the question is always presented as if the customer is going to pay more for an unsubsidized phone… which they generally don’t. All you do is pay for the phone on what is effectively credit. Pay now, pay more over time, but you will pay.

I’m getting ready to buy a new phone. I decided a year ago I would never go contract again.

I’ve already narrowed my choice down to three phones. I have yet to decide a carrier. (The T-Mob/Metro merger has me rethinking my carrier, but if their plans are reasonable, I may stick with them.)

Paying for the phone is easy, credit, maybe cash if there is a discount.

This article seems to imply that this is something new. T-mobile has been doing this for a while. I’ve been on there value plan which allows me to bring whatever phone I want to the network. And they have had no contract plans for a while now. For $70/mo you can have truly unlimited 4G. Purchase a phone from Google directly in the play store (LG Nexus) and you will save considerably.

If they focus on providing service and allow phones to not be tied to carriers it will promote competition in the phone market. New companies will come about that ONLY sell phones. That focus will undoubtedly lead to better phone prices. $300 isn’t bad for the Nexus 4 straight from Google and it is a quality smartphone. I’ll take that over $20-$30/mo more on my bill.